Walmart’s Playing Defense With Amazon

In the recently released Internet Retailer 2017 Top 500 List, it is clear who dominates online retailers. Amazon came in at number one with an Internet Retailer Performance Score of 71. Meanwhile, Walmart came in at number three with an Internet Retailer Performance Score of 68. Other companies on the list include Apple, Staples, and Costco, but one thing is clear: Walmart is no longer the undisputed powerhouse it once was.

This should come as no surprise. Walmart once dominated the retail conversation with its massive brick and mortar stores. Amazon got its start in the digital realm, and as such, it has been able to adapt more effortlessly. However, it is clear Walmart is putting up a fight and could potentially give Amazon a run for its money.

Utilizing Its Physical Stores

Walmart has nearly 4,700 stores located throughout the United States. Although more people are buying products online, there is still a significant portion of the population that prefers purchasing items in an actual store. Walmart is actually incorporating its stores into its digital models to cater to both sides of the population.

For example, Walmart allows customers to place orders for groceries online and then pick up food at a store. This is in direct competition with Amazon’s Prime Fresh service, which delivers groceries to customers’ houses. In some circumstances, Walmart also offers discounts for customers who want to pick up items ordered online at a store. It is much more affordable for Walmart to ship an item to one of its stores rather than send each individual item to people’s houses. These savings then get passed onto the customers.

Bringing More Assortment

Walmart has always been known as a one-stop shop for people’s needs. It has been a place people can visit to get clothes, food, toys and anything else you could imagine. However, Amazon’s strategy, as well as most other online retailer strategies, has been encroaching in on this. Other retailers have fallen to the wayside due to this, but Walmart is adapting.

As an example, Walmart has gotten into the high-end men’s fashion industry by acquiring Bonobos in 2017. Walmart has also purchased brands such as ModCloth and Jet. At the moment, items from these brands can only be purchased online, so people still cannot get them in a physical store. It is clear Walmart is looking to cater to different audiences to compete with the vast selection offered by Amazon.

Implementing Unique Delivery Strategies

When it comes to online purchase, delivery time is everything. People do not want to wait to receive their items, which is why Amazon Prime members can typically expect to receive products within a day or two. Walmart is trying out a new delivery strategy to see what effect it can have. Walmart offers extra pay to employees who drop off packages to customers who ordered online as long as they are within a 10-mile radius of the Walmart store. It will take some time to see if this strategy is effective, but with Walmart’s expansive employee base (it employs around 1.4 million Americans alone), it is a strategy Amazon cannot really duplicate.

Undercutting Amazon Prime

Around 54 million American households have an Amazon Prime membership. With such attractive features as free shipping and an expansive media collection, including movies, television shows and original series, there is a lot for people to gain by subscribing. Walmart needs to undercut Amazon Prime to remain relevant.

Walmart announced recently it will start offering free two-day shipping on purchases exceeding $35. This eliminated shipping fee is available to everyone, so unlike Amazon Prime where people need to pay an annual fee, anyone can take advantage of this policy. Walmart could start offering additional perks, and it is clear it wants to be a powerhouse in the online marketplace by bringing on experts from organizations such as Jet.com and Bonobos. Part of these retailer acquisitions means that Walmart brings in people who are knowledgeable of e-commerce who may not have worked at Walmart otherwise.

Don’t Have A Strategy For Selling Products On Walmart

Amazon has a major head start, but Walmart and other retailers like it are quickly playing catch-up. All this competition is good news for consumers looking for discounts and reduced shipping fees. It will take some time to see which shop ultimately reigns supreme.

That doesn’t mean you should be neglecting Walmart. If you’re not currently selling your products on their marketplace, you should be looking into how to get started selling on Walmart. If you’re still not sure of the best strategy for your ecommerce business on how to reach new audiences and sell more products, then it’s time to give us a call. To learn more about how OperationROI helps our clients sell more on Walmart and other marketplaces, contact us at 1-888-277-5429, or by filling out our contact form.